Tax Exempt Savings Plans [TESPs]

planteria

a couple of quick points..

perhaps the examples you are looking at aren't showing the Sum Assured to be higher than the total amount that will be invested over time, masonic? if the Sum Assured is higher than the total return, then as long as the investor adheres to the plan, even without bonuses there will be a positive return. and bonuses have been paid on top, in the example i am looking at here, for over 100years.

and noone has ever paid me to introduce them to a friendly society. i'm not asking you for £120 colsten, and am not offering you anything for your money:D

masonic

planteria wrote: »

perhaps the examples you are looking at aren't showing the Sum Assured to be higher than the total amount that will be invested over time, masonic? if the Sum Assured is higher than the total return, then as long as the investor adheres to the plan, even without bonuses there will be a positive return. and bonuses have been paid on top, in the example i am looking at here, for over 100years.

No, the ones I've looked at do not have a sum assured that is higher than the premiums paid. I have seen no evidence of any that do, but I have no reason to doubt that they exist. It doesn't really change anything. What gets paid out is a function of investment performance minus charges. When charges are high, then returns will be lower.

So the non-TESP With Profits options, such as the Sheffield Mutual S&S ISA charging 1.5%, or the Prudential products charging 1.35% are the way to go. As soon as you put a TESP wrapper around a product, it costs you an extra £150-£200 in fees.

and noone has ever paid me to introduce them to a friendly society. i'm not asking you for £120 colsten, and am not offering you anything for your money:D

In these schemes, the Friendly Society collects the money from the customer through increased premiums in the first year of the plan and pays the introducer, but you know that already.

colsten

planteria wrote: »

noone has ever paid me to introduce them to a friendly society. i'm not asking you for £120

I know you don't need to ask people to pay you as the firms are paying the introducers - easy to find out from the links I posted.

planteria wrote: »

am not offering you anything for your money

you made that clear for some time

planteria

i did yes, colsten.

Sum Assured certainly higher than total to be invested on my most important plans, masonic. i think one of them may have been slightly lower, but then it was into positive territory as soon as the first bonus was added.

and no, as far as i am aware there are no "increased premiums" involved. perhaps there have been some changes..

anyway, we know where we are folks.. despite some of the comments made in this thread, i was actually looking for some feedback. some of the responses i have received have come privately, as not everyone wants to put their head about the parapet.:D

Archi_Bald

There will always be lambs that want to be led to the slaughter.

masonic

planteria wrote: »

Sum Assured certainly higher than total to be invested on my most important plans, masonic. i think one of them may have been slightly lower, but then it was into positive territory as soon as the first bonus was added.

and no, as far as i am aware there are no "increased premiums" involved. perhaps there have been some changes..

Two examples of TESPs that charge higher premiums in the first year to cover the cost of trail commission are the Kingston Unity and Sheffield Mutual plans, both highlighted earlier in this very thread. A third example was linked to by Archi Bald - Healthy Investment - which is totally transparent about this:

Commission is payable directly to the Introducer for all leads that Healthy Investment converts into a new policy at the following rates:

Tax Exempt Savings Plans - 40% of the first years premiums

12.5 At present in the first year between 50 and 100% of the premiums you pay, depending on the term, are taken from your share of the fund to meet the costs of setting up the plan.

One of those costs being trail commission paid to the introducer. So in that case, it's £120 right out of the pocket of the introduced customer assuming they go for a £25 per month plan. Worth pointing out again that the regulator banned this practice in the fund management industry.

Would it be too bold of me to speculate that they state "between 50 and 100% of the premiums" because it's closer to 50% of the premiums if you go direct and 100% if you go via an introducer?

planteria wrote: »

some of the responses i have received have come privately, as not everyone wants to put their head about the parapet.:D

Well I can't say I'm surprised. Soliciting PMs was always your real motivation for your activity on this thread, wasn't it? I just hope you shared some of the money you received for the introductions with the people you introduced as is customary over on the Referrer's board.

If you followed forum rules and made your offers openly in the Referrer's board there would be some transparency and you might get a bit less grief here.

planteria

you are making incorrect assumptions.

several people here have been very happy with their TESPs and other Friendly Society policies, and have commented here or discussed privately. nothing wrong with any of that. and when this thread was started i was certainly learning about Friendly Society investments.

i've given some vouchers i received to some members of another forum, but haven't introduced anyone here at MSE to any Friendly Societies. as it happens i have shared referrals for current accounts as you describe.

and i think the info you are quoting is re. IFAs. as far as i am aware layman Introducers do not receive any trail commission. the £120 you refer to wouldn't be charged to the new member.

masonic

planteria wrote: »

several people here have been very happy with their TESPs and other Friendly Society policies, and have commented here or discussed privately. nothing wrong with any of that. and when this thread was started i was certainly learning about Friendly Society investments.

I can understand why some people might be satisfied by what they have received, but they probably don't understand what it has cost them or how they could have achieved a better result from a lower cost product. Hopefully some of my earlier posts will be helpful in that respect.

i've given some vouchers i received to some members of another forum, but haven't introduced anyone here at MSE to any Friendly Societies. as it happens i have shared referrals for current accounts as you describe.

and i think the info you are quoting is re. IFAs. as far as i am aware layman Introducers do not receive any trail commission. the £120 you refer to wouldn't be charged to the new member.

If you go to the link provided by Archi, you'll see it refers to "non-advised sales" from introductions. There is a difference between this sort of commission and the type previously received by IFAs on retail funds. Specifically, this is a huge percentage commission (40% in this case) funded by charges levied in the first year, whereas the typical IFA trail commission was a small percentage (typically 0.5%) levied over the lifetime of the investment. The £120 is one of the higher incentives paid, but it is clear this is not an IFA thing. I wonder if an IFA would even be allowed to receive the sort of kickback being paid to lay introducers.

colsten

planteria wrote: »

the £120 you refer to wouldn't be charged to the new member.

Silly me, there I was thinking it is the referred people who pay for the kickback to the introducers. When all the time it was the TESP fairy.

planteria

joke about fairies if you like, but what i wrote was right:)